Modest Growth Seen but Jobless Concerns Linger

Even with a boost from President Clinton’s proposed stimulus package, the U.S. economy will not grow fast enough to trim the unemployment rate by much this year, economists said Monday.

The National Assn. of Business Economists said a survey of 35 prominent economic forecasters produced a consensus that the jobless rate would average 7% this year, compared to 7.4% in 1992, before dipping to 6.6% in 1994.

Although the rate fell to 7.1% in January, 9 million Americans were still actively seeking employment.

According to the survey conducted in late January and early February, the economy will grow 3.1% this year, up from 2.1% in 1992, and then 3.2% in 1994.

But many analysts believe that the economy must grow much faster to produce many new jobs.

“To see some improvement in jobs and . . . wages you’ve got to have something like a 4% to 4 1/2% growth rate,” economist Lester Thurow of the Massachusetts Institute of Technology said Monday on CBS’ “Face the Nation.”

Leading this year’s economic growth will be a 6.5% increase in business investments and a 9% advance in construction of new homes, the consensus maintained.

However, consumer spending, which led the economy’s strong fourth-quarter growth, will slow from a 4.3% annual rate from October through December to just 2.9% in 1993. Consumer spending normally represents two-thirds of the nation’s economic activity.

But the relatively slow overall growth rate this year will help keep down inflation, the economists believe. The consensus projects the consumer price index will inch up from 2.9% in 1992 to 3.1% this year.